How to "Double Your Money in 5 or 6 Years"

When you see an Advert that proclaims -

"Double Your Money in 5 Years!"

What do you think, a 'Scam', and perhaps "Too Good to be True",
or what?

Well, I too was very 'sceptical' of such claims. However, rather than just 'dismiss' it, I decided to 'investigate' to see if it could be true - I'm glad I did, because it's not a scam!

I actually found a foreigner, who had put money into such "Double your Money in 5 Years" Time Deposits, here in the Philippines. Whilst it was High Risk potentially, he did receive, Interest Payments (totalling his Deposit), together with the returned Deposit, after 60 months.

Seems some Banks only offer, "Double your Money in 6 Years", now, but this is still a lot better than most Commercial Banks were/are offering for Peso Time Deposits.

One Bank, offering such a 'product' is http://www.firstcountryfinancial.com/labels/Deposits.html

Rates:12% for P3,000,000-P4,999,999.

Bankers Club Pensionado
Yes, you can retire rich!This is a long term special savings account that will double your money in 6 years, and lets you immediately have your interest income credited to your regular savings or checking account with First Country Bank every month, tax free!
Live off the interest on your investment and enjoy your dream retirement.

For:High net-worth individuals who want a high return on their deposit, but want to enjoy regular monthly interest income.

Benefits:

• Doubles investment in just 6 years
• Credits interest every month
• Exempt from withholding tax
• Loan against deposit

Rate:12% compounded (or 16% straight)

This is not the only such 'Rural' Bank offering such good Interest Rates
I also found this one from a 'Google' search:-
http://www.carloanphils.com/contact.html

Well that Website, also promotes Auto Loans on vehicles up to 15 Years old, with an Interest Rate for such Loans as low as 7%!

Do you think 7% pa Interest on a Loan where they offer up to 50% of a vehicles value as 'collateral' for such loan, is good rate?

Well perhaps 7%pa, seems a little 'high', to those in Western countries right now?

Well, not here in the Philippines - the cost of 'borrowing' cash is HIGH.

Pawn Shops/Money Lenders, will ask 3% per month (36%pa - or higher, as APR) typically!
That is for 'secured' loans' with collateral.

I was very happy to have discovered some Rural Banks, here in Cebu (and other parts of the Philippines), that pay 20%pa, with Interest credited monthly (tax free).

This is still the 'Double your Money' in 5 Years'.

In fact you can earn an even Higher Rate, than this?
If you invest the monthly Interest payments into other, shorter term Peso Time Deposits*, and then 'Roll these over', along with subsequent interest payments. Once you deposit has accumulated sufficient, you can move up to next 'tier', and for longer period, whilst other deposits build to similar levels.
Compound Interest on those Interest Payments

*Katuparan Special Savings
http://www.firstcountryfinancial.com/labels/Deposits.html

Rates:

-- RANGE --------------- 30 Days --60 Days -- 90 Days -- 180 Days
P5,000-P19,999 ---------------5% -- 5.25% ------5.50% -----5.75%
P20,000-P49,999 -----------5.75% ----- 6% ------6.25% ---- 6.50%
P50,000-P99,999 ---------- 6.75% ----- 7% ------7.25% -----7.50%
P100,000-P499,999 ---------7.75% ----- 8% ------8.25% -----8.50%
P500,000-P999,999 ---------8.75% ----- 9% ------9.25% -----9.50%
P1,000,000-P2,999,999 -----9.75% ---- 10% -----10.25% ----10.50%
P3,000,000-P4,999,999 ----10.75% ---- 11% -----11.25% ----11.50%
P5,000,000-Up ------------- (N E G O T I A B L E)

I just used FirstCountryFinancial.com as an illustration, as they have Rates that can be checked on their website.

For example, say you were to place a 5 Year Time Deposit of say Php240K with a Rural Bank offering 20%pa.
(Not advisable to place single deposit, in any 1 Bank, higher than Php250K. - limit for the PDIC insured Deposit.
See http://www.pdic.gov.ph/faq.asp for more info).

This would earn you Php4,000 a month, tax free interest, each month, for 60 months.

You would need 2 months Interest, to start placing Deposit in First Country Rural Bank, as an example.
After 5 months, you would have 20K, plus 4 months, accumulated, compounded interest, and able to earn higher interest at next 'Tier'.

At the end of 24 months you could have accumulated Php92,995.80 in Interest in this way, using those Rates.
At the end of 60 months you could have accumulated Php289,536.65 in Interest (120.64%, or 24%pa straight).

This, together with your Deposit of Php240K, gives a Total = Php529,536.65 (220.64%).

More than Double Your Money in 5 Years!

That was just a worked example, to show the effect of Compund Interest, applied to a Time Deposit offering 20%pa.

The Rural Banks offering 5 Year Time Deposits of 20%pa, may well have 30/60/90 Day Time Deposits etc, better than those of First Country Rural Bank, perhaps?
(But they don't have Websites 'advertising' such Rates).

Anyone wanting to check if a Rural Banks is 'genuine', can check /search the following websites:-

• http://www.pdic.gov.ph/database/memberbanks/current/searchmembanks.asp
  
• http://www.bsp.gov.ph/banking/directory.asp
  
• http://www.rbap.org/

If Rural Banks offering 20%pa via Monthly Interest payments (rather than 12%pa) has interested you, then contact me, for more information, or stay 'tuned' to My Blog, for more 'posts' on such Banks and Deposits.